Economics

Walmart is toxic to existing business

Their entry into a market has a strong negative effect on existing retailers. Supermarkets are the most adversely affected, with sales declines of from 10% to 40%. One study showed supermarkets within one mile of a new Walmart have a 25% chance of closing in the first year, and 40% chance in two. [reference]

Walmart's entry into a local market actually reduces total economic activity

The economic decline can be huge. A study of the grocery industry in southern California found that Walmart’s impact approached minus $2.8 billion dollars per year. [reference]

Walmart sucks money out of the local economy

Money spent at Walmart leaves the area immediately, while local businesses spend more locally. That money circulates in the local economy, enriching the community. [reference]. Because of low wages and benefits, Walmart removes money from the local economy faster than their chain competitors that pay better…and most do.

Taxpayers make up for low wages and benefits

Walmart costs taxpayers an estimated $1 billion per year subsidizing low wages and benefits:

• Health care - Walmart health plans have high deductables and high premiums. Hundreds of thousands of their employees can't afford their insurance and rely on taxpayer-supported assistance programs. In 21 of 23 states that disclose information, Walmart has the largest number of employees on the public rolls of any employer. [reference]
• Welfare subsidies - Walmart encourages employees to supplement their low income by taking advantage of public assistance programs such as food stamps, housing subsidies, and other welfare programs. [reference]
• Finding tax loopholes - Walmart deducts rent payments made to itself (through a real estate trust). Cost to taxpayers: $300M/year. They aggressively challenge tax assessments on property they own. Loss to taxpayers: $ millions in legal fees, $ millions is lost tax revenue. [reference]